Chandigarh

DF-I

CC/1088/2009

Surinder Chandna Advocate R/oHouse No. 1276 Sector-22/B Chandigarh - Complainant(s)

Versus

M/s Dewan Associates North India - Opp.Party(s)

09 Mar 2010

ORDER


CHANDIGARH DISTRICT CONSUMER DISPUTES REDRESSAL FORUM - I Plot No 5- B, Sector 19 B, Madhya Marg, Chandigarh - 160 019
CONSUMER CASE NO. 1088 of 2009
1. Surinder Chandna Advocate R/oHouse No. 1276 Sector-22/B Chandigarh UT ...........Respondent(s)


For the Appellant :
For the Respondent :

Dated : 09 Mar 2010
ORDER

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BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

========

 

Complaint  Case No  :1088 of 2009

Date    of  Institution :   03.08.2009

Date   of   Decision   :   09.03.2010

 

Surinder Chandana, Advocate, Resident of H.No.1276,  Sector 22-B, Chandigarh.

 

….…Complainant

 

V E R S U S

 

M/s Dewan Associates North India Stock Exchange, Near General Post Office, Sector 17-E, Chandigarh, through its Authorized Person.

 

.…..Opposite Party

 

CORAM:    SH.JAGROOP SINGH MAHAL       PRESIDENT

                DR.(MRS) MADHU BEHL              MEMBER

                SH.RAJINDER SINGH GILL           MEMBER

 

Argued by:       Capt. Arun Sharma, Adv. for complainant.

Sh.Rohit Goswami, Adv. for OP.

 

PER SH.JAGROOP SINGH MAHAL, PRESIDENT

 

                The complainant placed an order with OP for purchase of 500 shares of Tata Tele and 500 shares of IFCI for which OP raised a bill of Rs.78,000/-.  The said amount was paid to OP through cheque dated 22.11.2007 but inspite of that the OP neither transferred the shares in his account nor explained the accounts and holdings of the shares so purchased nor returned the money of the complainant.  Ultimately, a legal notice was sent to OP twice but to no avail.  Hence, this complaint alleging the above act of OP as gross deficiency in service and unfair trade practice due to which the complainant had to suffer great mental tension, physical harassment and financial loss.

 

2]             OP filed reply and took objection to the effect that complainant is not a consumer qua OP.  It is admitted that complainant placed an order of 500 shares of IFCI and 500 shares of Tata Teleservices for total value of Rs.78,000/-.  It is stated that the said shares were lying in the pool account of the complainant and he has never made any request to transfer the same in his demat account.   The complainant was using these shares as an margin money/guarantee and was doing intra day trading i.e. purchasing and selling of shares on the basis of these shares.  It is also stated that the complainant had suffered a loss in intra day trading and was to pay balance amount to OP for which the complainant was informed to either clear his dues or his shares will be adjusted by selling but inspite of that he failed to clear his dues and as such the said shares were sold.  It is further stated that the complainant had to pay Rs.5912.36Ps. to OP.  Denying any deficiency on their part, OP prayed for dismissal of the complaint with cost.

 

3]             Parties led evidence in support of their contentions. 

4]             We have heard the ld.Counsel for the parties and have perused the record.   

5]             The OP in reply to para number 2 has admitted that the complainant placed an order or 500 shares of IFCI @Rs.103.02 total value 51,510 and 500 shares of Tata Teleservices @Rs.53.53 valuing Rs.26,765/- for which the complainant paid a sum of Rs.78,000/- through cheque.  The complainant in order to prove this fact has also placed on file the copy of the statement of account now marked as Annexure C-1 showing that a sum of Rs.78,000/- was transferred from the account of his wife Mrs. Usha Chandna on 22.11.2007 to Diwan (OP). The OP has also attached the statement of his account now marked Annexure R-2 showing that the said amount of Rs.78,000/- was received by the OP on 21.11.2007 by cheque. In this manner the payment of Rs.78,000/- for the purchase of the aforesaid shares stands proved.

6]             The OP has not been able to show if they had utilized the said amount by purchasing the shares of the complainant.  The non performance of the said order therefore amounts to deficiency in service.

7]             The Learned Counsel for the OP has referred to the case “ICICI Bank Limited & Anr. Vs. Dr.B.P. Gayathri & Ors., III (2006) CPJ 182” and argued that where an application is made for allotment of shares, the person investing money is prospective buyer and not a consumer. This authority is not applicable in the present case because here no application was moved by the complainant nor was he requesting for allotment of shares, infact the shares had already been allotted by the company and having been purchased by different investors and the complainant was asking for purchasing from the stock market 500 shares out of those through the OP. It is therefore a case of sale and purchase by the OP as a broker for the complainant and not a case of allotment of shares by the company to an applicant.

8]             The Learned Counsel for the OP has also referred to “Morgan Stanely Mutual Fund Vs. Kartick Das, II (1994) CPJ 7 (SC)” in which also it was held that a share is not a sum of money; it represents art interest measured by a sum of money and made up of diverse rights contained in the contract evidenced by the articles of association of the Company. It was held that it is after allotment that rights may arise as per the contract, but not before the allotment. This case also relates to allotment of shares by the company but in the present case the complaint is not filed against the company for none allotment of the shares but it is against the OP for deficiency in rendering proper service by purchasing the shares asked for by the complainant.

9]             The Learned Counsel for the OP then referred to the case “Hemant Kumar Chokani Vs. Bank of America, I (2007) CPJ 203”. In that case the shares were kept as a security and the limit of overdraft used to be raised depending upon market value of pledged shares.  It was held that on a certain date, overdraft limit reduced to Rs.20,900/- while outstanding of the complainant was Rs.39,282/- and the complainant failed to regularize the overdrawn amount out of which the OP sold the pledged shares and adjusted the proceeds. The Learned Counsel has referred to para number 5 of the reply and the affidavit and asserted that 500 shares of IFCI were sold by them @Rs.42.57P and 500 shares of Tataservices were sold @Rs.27.82P as these shares were used as  margin money by the complainant.  The OP has failed to show as to when were these shares transferred to the account of the complainant because only then he could keep those shares to use them as margin money. The Learned Counsel for the complainant has argued infact after purchasing these shares the OP kept the same in his own account so as to allege that those have been purchased by him from his own money if the market rises and if there is a slump in the market then to assert that these were purchased with the money advanced by the complainant, so as to cause him wrongful loss.

10]            The contention of the OP that there was debit amount as Rs.1,20,042 paisa and credit amount as Rs.1,14,130.50 paisa out of which the complainant was still to pay Rs.5,912.36 paisa adjusting after selling the said shares. If anything else was due from the complainant, the OP would have demanded the same but no such amount was demanded from the complainant for the period of about 3 years.  The complainant has filed replication to the written statement in which it was specifically denied in para number 3 on merits that he had never used these shares as margin money/guarantee and ever indulged in intra day trading.  He has also disputed the assertion that anything was due from him and contended that the reason for selling the shares on 26.03.2008 is not explained by the OP and the account statement shows that the OP had not demanded the money for the last three years. We are therefore not inclined to accept the contention of the OP that there was anything due from the complainant or the shares were being used as margin money. The OP therefore played a mischief firstly by not transferring the shares in the account of the complainant and secondly by selling the same on 26.03.2008 when the market was going down thereby causing a loss to the complainant.

11]            In view of the above discussion, we are of the opinion that the OP had been deficient in rendering proper service and rather was adopting an unfair trade practice of keeping the complainant in dark about the purchase of the shares and thereafter selling it without instructions from the complainant when the market was going down.  It not only resulted in loss to the complainant but also caused him mental and physical harassment.  The OP may be indulging in this practice with respect to other investors also.  We are therefore of the opinion that the complainant is entitled to the amount of Rs.78,000/- from the OP besides compensation.

12]            In view of the above discussion, the complaint is allowed. The OP is directed to refund the amount of Rs.78,000/- alongwith Rs.5,000/- as costs of litigation.  The OP shall also pay to the complainant Rs.50,000/- as compensation for causing him monetary loss and physical and mental harassment.  The aforesaid amount shall be paid within 30 days from the date of receipt of the copy of this order failing which the OP would be liable to pay Rs.78,000/- alongwith penal interest @12 % p.a. since 22.11.2007 and Rs.55,000/- with interest @12% p.a. since the date of institution of the complaint i.e. 3.08.2009 till the payment is actually made to the complainant.

 

          Certified copies of this order be sent to the parties free of charge.  The file be consigned.

 

 

Sd/-

Sd/-

   Sd/-

09.03.2010

March 9, 2010

[Rajinder Singh Gill]

[Dr.(Mrs) Madhu Behl]

[Jagroop Singh Mahal]

 

Member

Member

President

 

 

 

 

 


RAJINDER SINGH GILL, MEMBERHONABLE MR. JAGROOP SINGH MAHAL, PRESIDENT DR. MADHU BEHL, MEMBER